L.A. confidentiality

In an age in which gossip is currency, nondisclosure contracts have become like prenups between Hollywood and the help. The unfamous want them too.

By Audrey Davidow
Special to The Times

July 26, 2007

Spend enough time trolling YouTube and Hollywood gossip blogs, and it's clear why so many celebrities guard their private lives almost as zealously as they hoard swag bags. After all, it's what happens off-screen, in the comfort of their swimsuit-optional Jacuzzis, that can translate into pure embarrassment -- not to mention millions of dollars' worth of tabloid fodder.

So now some celebs have gone on the offensive, and their weapon of choice? It's the nondisclosure agreement, or NDA, a contract that requires nannies and other home helpers to promise that they won't videotape, photograph or blab about anything they see or hear. Such agreements are nothing new, but these days practically everyone working in the home -- the housekeeper, the leaf blower, the bathtub installer -- may be pressed to sign strict don't-tell policies.

"It's the information age, and information is power," says Peter Dunham, an interior designer based in West Hollywood who is often privy to VIP secrets through his work for celebrities. Dunham says requests for nondisclosure agreements have become so prevalent, he's had to add a boilerplate in his contracts stating that he and his staff will keep their lips sealed on every detail, be it the celebrity's address, her budget, the kind of flowers she prefers in the foyer or the intimate details of what lies in her closets.

"I don't even want to know things about my celebrity clients for fear it will slip through my mouth accidentally," he says.

One A-list film director, whose name he can't reveal, was so concerned about privacy that Dunham wasn't even allowed to take the standard "before" pictures of the home for planning purposes. The director, whom Dunham recognized at first sight, also insisted on meeting under a pseudonym. Dunham's philosophy: "If you're going to pay me, I'll call you whatever you like."

As president of L.A.-based NorthStar Moving, whose clientele has included Angelina Jolie, Eva Longoria and Diane Keaton, Ram Katalan says he's seen a change not only in the number of people asking for confidentiality but also in the type of customers asking for it.

"A few years ago, we never had non- celeb clients asking us to sign an agreement," he says. And these says? Forget B- and C-listers. Nonlisters demand confidentiality.

"We've even had divorced couples, where one spouse doesn't want the other to know where they are moving," says Katalan's partner, Laura McHolm, who has been known to send out decoy trucks, start moves at 2 a.m. or employ other stealth tactics to protect clients from paparazzi and snoops.

After six years in business, LA Pool Guys owner Bryan Barnes signed his first nondisclosure agreement last year -- and it wasn't even for a celebrity.

"We don't even know the guy's name," Barnes says. "He just had his management company hire us, but we adhere to it so that we can keep the account."

Interior designer David Dalton's clients run the gamut from media-friendly skating commentator Scott Hamilton and singer Meatloaf to "big divas" with bodyguards and secret entrances to their homes. He too has noticed more noncelebrities asking for the kind of confidential treatment traditionally reserved for Hollywood stars.

"They're usually wealthy business people whose business is private, or whose income comes from let's just say interesting parts of the business sector and they don't want to disclose how they make their income," he says.

More of his subcontractors are being asked to promise secrecy too. This year, Dalton is working with a first: a client who requires every delivery person at the door to sign a nondisclosure agreement.

WHY the need for all the covert operations? In Southern California, where golden gossip sells like precious metal, a juicy celebrity story can be worth more than jewelry, art, antiques or electronics. Recent stories about burglaries at celebrity estates focused on looted cash and costly belongings, but the reality is that to many in Hollywood, image and reputation are far more valuable. Bringing, say, an interior designer into a home hardly seems risky until a client asks to fix up the guesthouse for the spouse -- or perhaps install mirrors above the bed, arranged just so.

Allegations surfaced last week in the case of Broadcom co-founder and former chief executive Henry T. Nicholas III, sued by an assistant who alleged drug use and debauchery at Nicholas' Newport Beach home. Nicholas responded by saying the assistant was bound by confidentiality agreements barring the disclosure of any information about the billionaire.

Southern California -- home of the sprawling estate, full of nooks where an interloper could hide and gawk -- can make a private person downright paranoid.

"It's not like in New York, where people have a doorman and a lot of security," Dunham says. "In L.A., you don't have to be Victoria Beckham to feel somewhat vulnerable."

Then, of course, there's the technology factor.

"Any plumber or gardener can use a cellphone camera to film a husband and wife fighting, or a child having a tantrum, or a client getting out of a shower, and then download it anonymously to YouTube," says Paul Nicholas Boylan, an attorney in Davis, Calif., who specializes in nondisclosure agreements. "In a world like this, it makes sense that a contract to fix a sink or mow the lawn would contain a confidentiality agreement."

One person who knows just how much the ground has shifted is Suzanne Hansen, author of "You'll Never Nanny in This Town Again: The True Adventures of a Hollywood Nanny." The 2006 tell-all chronicles her stints working for Michael and Judy Ovitz, Debra Winger and Danny DeVito in the late 1980s and '90s.

"I could never have written it if I had been working today," Hansen says. "Now everyone has such elaborate confidentiality contracts."

Among the anecdotes she recounts in the book are tales of Judy Ovitz's tantrums and Michael Ovitz's threats to blackball Hansen from the Hollywood nanny circuit.

"I think that many of his colleagues who didn't like him probably got a good laugh about what a savvy business man he was," she says, "but, in the end, he forgot to have me sign a confidentiality agreement."

To which Michael Ovitz's lawyer, James Ellis, responds: "Just because you don't have a written confidentiality agreement, it doesn't mean you should feel free to betray the trust and confidence a family places in you by selling their secrets. It's quite possible the current popularity of domestic NDAs is in direct response to the bad experiences that innocent families have had with the likes of Suzanne Hansen.

"It's a shame that people used to have ethics and consciences, and now we're left with NDAs and confidentiality agreements."

Funny thing is, some legal experts suggest that a nondisclosure agreement may not have helped Ovitz anyway.

"Many attorneys make a fundamental drafting error," Boylan says. "They try to protect a celebrity's privacy. But the more famous a celebrity is, the less they have any reasonable claim to privacy."

In 2005, Victoria and David Beckham found that out the hard way when they sued their former nanny, Abbie Gibson, for violating confidentiality. Despite signing multiple agreements promising to keep her lips sealed about the Beckhams' personal life, she eventually blabbed about David's alleged infidelities and the couple's marriage woes to the British publication News of the World for what the BBC reported to be 125,000 pounds, which is more than $250,000 today.

A British court ruled in favor of Gibson, essentially finding that as public figures by choice, the Beckhams didn't have much right to privacy.

Instead of focusing on privacy, Boylan says, they would have been better off protecting their monetary interests.

"The agreement should have stated that they owned all the information about themselves and that such information had monetary value," he says. "So if the Beckhams' nanny breached the confidentiality agreement and sold the information, the nanny would have been stealing from the Beckhams."

That's how Michael Douglas and Catherine Zeta-Jones won their 2003 case against Hello! magazine for publishing photos of their 2000 wedding taken by someone posing as a guest or a waiter. The couple focused on the economics of having their property stolen -- in this case, wedding pictures promised to a rival publication. A judge ruled for them.

"It's tough to have legitimate privacy gripes when you're putting yourself out there for all to see," Boylan says. "The people who really do have a claim, however, are the noncelebs. Their right to privacy is greater, and therefore they have a bigger interest in these kinds of agreements."

Even then, such nondisclosure agreements can give a false sense of security, Beverly Hills attorney Ryan Lapidus says.

"It's very hard to show that damages were caused by a breach of confidentiality," he says. "So your gardener slips up and the world finds out you like black roses. What kind of damages did you really suffer? Not to mention, many domestic workers may not have much money to collect, anyways."

The point, after all, has long been to deter, not to collect. When Tom Cruise and Nicole Kidman were still married, an employee -- alternately described in court documents as a "wardrobe in charge," a personal aide and a housekeeper -- signed an agreement that stipulated steep penalties for photographing, filming or otherwise disclosing "any aspect of any activity occurring at, in or about any home or other property owned, occupied or used by the Employer or any member of the Cruise family."

What kind of "damages" did they want for every violation of the agreement? The list, as reported by the Smoking Gun website, included $20 for each copy of a newspaper or magazine that published the information (with a $1-million minimum total payment), $2 million per nonnetwork U.S. broadcast and $5 million per network broadcast.

For the most part, Dunham says, the confidentiality agreement simply formalizes the fact that it's just smart business to keep your mouth shut.

"Sure, it would be tremendously tempting for people to aggrandize themselves by publicizing a high-profile relationship," he adds. "But I'd rather get press for how fabulous I am, not because I'm divulging information about the underwear color of my hot clientele."